On March 10, the day after the DOGE/BTC pair hit its lowest level since October 2022, DOGE erased some of its losses against Bitcoin. Will prices extend the extended recovery in the near term?
On the daily chart, DOGE/BTC hit 331 sats, up 4.75% from yesterday’s low of 316 sats. The bounce happened near a downtrend line that has been active for several months, helping to limit the pair’s downside from November 2022.
Daily DOGE/BTC Price Chart | Source: TradingView
Price Technical Analysis governor/bitcoin
Interestingly, the descending trendline on the DOGE/BTC chart is part of a descending wedge pattern. Traditional chartists view a descending wedge as a bullish reversal setup, especially with a 62% success rate in hitting bullish targets.
In the case of DOGE, the price is oscillating near the top of a descending wedge, where the upper and lower trendlines meet. The latest bounce off the lower trendline increases the odds of a test of a breakout of the upper trendline, as seen in the chart below.
Daily DOGE/BTC price chart and break out Descending Wedge Pattern | Source: TradingView
The bullish pattern is further supported by the daily relative strength index (RSI) around 28. From a technical point of view, an RSI below 30 means that the pair is oversold, which could lead to sideways or upward consolidation.
If there is a breakout, DOGE/BTC could rally to the 500 seat in April, 50% above current levels. The upside target is calculated by adding the maximum distance between the upper and lower trendlines of the falling wedge and the breakout point.
However, a clear break below the lower trendline of the descending wedge could invalidate the entire bullish pattern. Instead, DOGE could drop to the historical support level of 280 sats, about 13% below the current price.
This scenario is possible as DOGE failed in the March 2022 falling wedge pattern, in which the DOGE/USD pair broke below the lower trendline, resulting in a 50% loss.
road DOGE price?
However, DOGE could still decline against the USD, mainly due to heightened macroeconomic volatility.
Over the years, the DOGE price has mostly been driven immediately by news and support from Elon Musk, including hopes for a Twitter payment option.
However, on March 3, Musk announced a shift in focus from encryption to artificial intelligence. The billionaire not only pointed out Dogecoin, but many people explained that Musk may leave this industry in the future.
“I used to be interested in encryption, but now I’m interested in artificial intelligence”, Elon Musk tweet.
Since Musk’s tweet, DOGE price has dropped more than 20% to $0.06. Also, from a technical standpoint, the price is poised for another 10% drop in the coming weeks as the price retests old support around $0.055-$0.042.
Weekly DOGE Price Chart | Source: TradingView
Conversely, a bounce off the support zone could help DOGE test the upper trendline of the triangle near $0.076, leading to a 15% increase in the current price.
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As reported by Cointelegraph